Form 1099
The IRS information return family used to report payments to independent contractors, dividends, interest, and other non-employee income — most commonly the 1099-NEC and 1099-MISC.
Form 1099 is the family of IRS information returns that report non-wage payments. A business that pays $600 or more to a non-employee for services in a calendar year must issue a 1099 to the recipient and file a copy with the IRS by 31 January. The recipient uses it to report self-employment income on Schedule C and pay the resulting income tax plus self-employment tax.
The variants you’ll see most:
- 1099-NEC (Nonemployee Compensation): used since 2020 for payments to independent contractors. The single most common 1099 for freelancers, consultants, and side-hustle workers.
- 1099-MISC: rents, royalties, prizes, awards, and a residual catch-all that’s much narrower than it once was.
- 1099-K: payment-card and third-party network transactions (Stripe, PayPal, Etsy, etc.). The 2026 threshold dropped to $600 — generating 1099-Ks for many casual sellers who didn’t realise they crossed the line.
- 1099-DIV / 1099-INT / 1099-B: investment-related — dividends, interest, brokerage transactions.
1099 income carries the self-employment-tax burden (15.3% covering both FICA halves up to the Social Security wage base, with the deductibility of one half on the 1040). That’s the single biggest financial difference versus W-2 employment at the same gross amount.
Use the self-employment tax calculator to estimate the SE-tax liability on 1099 income.
Published 10 May 2026